The Mythical Million Dollar Run Rate
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People obsess about college rankings, baseball stats, and other forms of numerology out of a natural human desire to simplify and bring order to their world. Seed stage startups often do this by fixating on a single revenue number — a million-dollar run rate.As far as round numbers go, a million dollars of annual revenue is a great sign of progress. Once upon a time, it really was a marker that made a meaningful difference in raising a Series A, but the imaginary milestone of $83K in MRR isn’t the ticket to a Series A that it was five years ago.Over the last half-decade, there’s been substantial inflation in round sizes, to the point where a Series A has the dimensions, and prerequisites, of what would have been closer to a Series B round 5 years ago. When evaluating decks, Series A (...)
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